Fewer newcomers to our city will translate into weaker housing demand and lower housing prices for the foreseeable future, say housing experts.

According to the City of Calgary’s 2016 census released last month, more than 6,500 people left the city between April 2016 and April 2015. The 4,256 population jump to 1.235 million was primarily attributed to an increase of births versus deaths.

“Not surprisingly, the overall impact of lower population growth in Calgary will weigh on its real estate market,” said ATB Financial economist Nick Ford. “Housing prices may continue to slide lower in all areas of the city as a result of declining demand.

CREB® chief economist Ann-Marie Lurie agreed migration declines will have a direct impact on the real estate market in 2016. She noted many migrant workers and would-be homebuyers who were once destined for Alberta are now moving to British Columbia and Ontario, whose economies are much stronger.

“(Net migration) is pointing to that weakness in demand. We’re seeing it throughout the housing market.”

“Less migration to the city will continue to weaken demand for housing in 2016, making it more difficult to absorb the additional supply and continuing to place further downward pressure on housing prices,” said Lurie, who, in the mid-year update of CREB®’s 2016 Economic Outlook & regional Housing Market Forecast, expected the benchmark price to fall by 3.8 per cent to $440,812 in 2016. That’s a revision from the 3.4 per cent decline expected at the start of the year.

“(Net migration) is pointing to that weakness in demand. We’re seeing it throughout the housing market.”

Moving forward, the Conference Board of Canada expects population growth in the Calgary census metropolitan area to grow by just 1.7 per cent this year – a stark contrast from 2.4 per cent in 2015 and 3.5 per cent in 2014.

“In the near future, housing demand is expected to decline. The price of oil has once again fallen due to supply increases and rising inventories. Alberta’s oil industry will feel sluggish over the next couple of years which will translate into sunken housing demand in energy-centric cities.”

Ford noted the most recent population and net migration numbers show Alberta’s strong relationship with the petroleum sector.

“The 2016 census showed that more than 6,500 Calgarians decided to pack their bags and try making a living elsewhere, a number not seen since the late-1980s,” he said. “This is strictly the result of poor economic performance caused by the stress and strain in the oil and gas industry as well as its related sectors.”

“There are a number of factors that help drive (real estate) activity. Population growth is one of those things.”

According to the conference board, the Calgary CMA economy grew at an annual rate of five per cent in 2014, but contracted by 2.5 per cent in 2015 and is forecast to shrink by another one per cent this year.

The slumping economy has also had an impact on employment. The conference board has forecasted employment growth in the CMA to decline by 1.3 per cent his year, down from 2.1 per cent in 2015 and 2.6 per cent in 2014.

“There are a number of factors that help drive (real estate) activity. Population growth is one of those things,” said Richard Cho, principal of market analysis in Calgary for Canada Mortgage and Housing Corp. (CMHC).

“For the last number of years, population growth has been quite strong in Calgary. But with the economy going down we are seeing population growth slow down as well.”

Cho pointed to net migration as a key indicator of the economy’s health. In 2013, Calgary posted a positive net migration of 38,331 people, followed by 35,692 in 2014 and 21,057 in 2015. This year, he expects negative net migration as indicated by the City’s recent census results.